Fail, pause, rethink

It’s been two months since the Australian Competition and Consumer Commission scuttled
National Australia Bank
’s bid for AXA Asia Pacific, and
AMP
’s fresh offer for the wealth manager will stir up bad memories.

NAB chief
Cameron Clyne
chased
AXA Asia Pacific Holdings
for the best part of a year before conceding there was no point in continuing to butt heads with the ACCC.

Now, with AMP’s revised bid providing a cause for reflection, it’s time to consider what is next for NAB. The bank appears to have little stomach for major acquisitions after losing out on AXA APH. Mr Clyne conceded as much last month, saying his appetite for big deals was “low".

In any case, the list of major wealth management targets is thin, outside of perhaps
Challenger Financial Services Group
and
IOOF Holdings
. Instead, NAB’s focus is likely to be on small, bolt-on acquisitions, possibly in the financial planning space. It could also bolster its banking arm in the US and maybe Britain, if the right deals emerge.

Experts say the task of increasing NAB’s share of the mortgage market, where it lags its big four peers, is the main concern.

“The priority is organic growth," said Credit Suisse analyst Jarrod Martin. “NAB’s strength is the business bank. The retail bank has been the laggard. That is probably where they can get some improvement in the short term. "